5.01 Objective A

Front

What is pricing in the context of marketing?

Back

The determination of an exchange price at which the buyer and seller perceive optimum value for a good or service.

Front

Why is effective pricing important for a business?

Back

It is crucial for customer satisfaction and the continued success of the business.

Front

What is meant by the term "exchange price"?

Back

The monetary amount agreed upon by the buyer and seller for a product.

Front

What might happen if buyers and sellers do not perceive optimum value in a transaction?

Back

Customers will spend their money elsewhere.

Front

Which of the following is NOT a characteristic of effective pricing? Realistic, Flexible, Competitive, Arbitrary

Back

Arbitrary

Front

Why might a business set prices too low?

Back

To attract more customers by offering a bargain.

Front

What is a potential consequence of setting prices too low?

Back

Customers may associate low prices with low quality.

Front

What is an example of a price attached to a service?

Back

Legal fees for a lawyer's services.

Front

Who is typically responsible for setting prices in a small business?

Back

The manager or owner.

Front

In larger companies, which department is usually responsible for setting prices? Options: Human Resources, Finance, Marketing, Sales

Back

Marketing